CHAPTER II: Inter-American System of Human Rights and the Right to Social Security
3. Current Legislation on Social Security in Peru
The Political Constitution of Peru recognizes the universal and progressive right to social security.321 The State ensures this right through the public national system of social security or the private system,322 recognizing that the resources obtained from the contributions of the employees cannot be alienated.323
The current social security system in Peru is governed by two legal acts and respective regulations.
The first act is the Law Decree No. 19990, which regulates the national standards for the right to a retirement pension, invalidity pension, and survivor pension; the second is the Act No. 26790, which regulates the modernization of the social security system in health, and includes subsidies for temporary incapacity, maternity, and breastfeeding.
I. Right to Retirement, Survivor and Invalidity Pension: Law Decree No. 19990
o General Provisions.
The current law that regulates the right to pension, survivor, and invalidity benefits in Peru is the Law Decree No. 19990 enacted during the revolutionary period of the government of the former President of Peru, General Juan Velasco Alvarado. The agency responsible for the system of pensions in Peru is the “Oficina de Normalizacion Previsional” (ONP).324
The Law Decree No. 19990 is applied to employees of the private sector, employees of the public sector who work in the judicial branch, diplomatic service and the magisterium (Professors of the Public Sector), domestic employees, artists, and other classes of employees that the Peruvian Government authorizes by Supreme Decree.325 To be eligible for these benefits, employees need to make a monthly contribution of 13% of their insurable wage.326 The insurable wage does not include extraordinary bonuses based on productivity, or insurance to cover loses for money or equipment given to the employee for use in their work.327
The 13% contribution rate is the result of increases during the last several years.328 The Peruvian government has the option to increase or decrease this percentage based on the financial situation of the country. The law is clear, however, that in cases of financial deficit, this percentage must be reduced only when the deficit is permanent.329 The ONP bases its determination on whether to
321 Peruvian Legislation, Political Constitution of Peru (1993), supra note 265, art 10.
322 Id., art. 11.
323 Id., art. 12.
324 Peruvian Legislation, Law Decree No. 25967, 7 December 1992.
325 Peruvian Legislation, Law Decree No. 19990, “Sistema Nacional de Pensiones de la Seguridad Social”, 30 April 1973, art. 3.
326 Id., art. 7.
327 Id., art. 9.
328 The percentage of contribution to the National System of Pensions was 9% in July 1995, 11% in 1995-1996, and 13 % in 1997. See Minister of Economy and Finances, “The System of Pensions in Peru”, May 2004, p.3. Available at https://www.mef.gob.pe/contenidos/pol_econ/documentos/sistemas_pensiones.pdf
329 Peruvian Legislation, Law Decree No. 19990, supra note 325, art. 20.
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increase or decrease the percentage from an analysis of the country’s financial situation over a five years period.330
This percentage needs to be paid to the national system of pensions by the employer, and the amount of the pension should be calculated according to the average of the wage of the employee during the last 12 months before the contingency that generates the pension.331 It should be noted that the employee receipt of benefits cannot be affected by the employer’s failure to forward the employee contribution to the ONP.332
This system also provides the employee the right to file administrative complaints before the ONP.333
o Benefits
- Invalidity Pension
This benefit is granted to an insured employee who has suffered physical or mental incapacity and who is unable to earn more than one-third part of his insurable wage.334 This benefit is also granted when the employee, upon cessation of the sickness benefit, is still unable to work.335
This benefit is payable when: a) the invalidity occurs after 15 years of contributions; b) the invalidity occurs after the employee has more than 3 and less than 15 years of contributions, including 12 months of contributions during the last 36 months before the contingency; c) the invalidity occurs after the employee has made contributions for at least 3 years and half of these contributions have been made during the last 36 months before the contingency; d) the invalidity is caused by a work accident or professional infirmity, provided that before the contingency the employee was contributing to the national system;336 or e) the invalidity occurs after the employee has contributed for more than 1 year and less than 3 years, counting at least 12 months of contributions in the last 36 months before the contingency.337 It is important to note that when the beneficiary qualifies for a retirement pension or has recovered the capacity to work338, the invalidity benefit is canceled.339
The percentage of the invalidity pension is 50 % of employee earnings. This percentage may be increased: a) when the years of contributions exceed three years, the Government will pay 1%
more for each year that exceeds the three years of contributions;340 b) when the employee, during the period of invalidity, is responsible for a spouse the amount will be increased from 2 % to 10%;
c) when the employee during the period of invalidity, is responsible for children the amount will
330 Id., art. 19.
331 Peruvian Legislation, Regulation of the Law Decree No. 19990, approved by Supreme Decree No. 011-74-TR, art.
24 and 53
332 Peruvian Legislation, Law Decree No. 19990, supra note 325, art. 70.
333 Id., art. 80.
334 Id., art. 24 (a)
335 Id., 24 (b)
336 Id., art. 25.
337 Id., art. 28.
338 Id.
339 Id., art. 25.
340 Id., art. 27.
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be increased from 2 % to 5 %;341 and d) when the employee due to the disability requires permanent care from another person, a minimum remuneration will be granted.342
The Peruvian Government reduces the amount of this benefit in cases where the beneficiary is receiving this benefit and is also performing paid work.343 In cases where the employee has returned to his remunerative activities, it is a duty of the employee to inform the ONP about this event within 30 days after returning to work.344
Finally, the beneficiary is also entitled to obtain medical assistance. To obtain this benefit, the employee needs to contribute with a payment of 4% of the invalidity pension to the ONP.345
- Retirement Pension
The beneficiaries of the retirement pension are male employees who have reached 60 years of age, female employees who are 55 years old, or employees who have reached the mandatory years of contribution established by the ONP.346
The percentage of the retirement pension is equivalent to 50 % of the employee’s remuneration for male employees who have complied with 15 years of contributions, and in the case of female employees who have made 13 years of contribution.347 This percentage may be increased: a) when, after reaching 15 years (men) or 13 years (women) of contributions, the employee continues working and contributing to the system, in which case the State recognizes for each additional year an additional 2 % (men) and 2.5 % (women);348 b)when the person who has qualified for retirement pension is responsible for a spouse, the amount will be increased between 2 % to 10%;
and c) when the person who has qualified for retirement pension is responsible for children, the amount will be increased from 2 % to 5 %.349 When the employee has at least 5 years of contribution, the employee will have the right to claim a reduced pension in the amount of 1/30th (men) or 1/25th (women) per year of contribution.350
A special case is presented for early retirement when a female employee reaches the age of 50 years with 25 years of contributions, and male employees reach the age of 55 years with 30 years of contributions, the retirement pension is equivalent to 30 % of their previous earnings.351 The Law Decree No. 19990 does not explain the difference in treatment between male and female workers in receiving this benefit.
341 Id., art. 29.
342 Id., art. 30; Peruvian Legislation, Regulation of the Law Decree No. 1999, supra note 331, art. 36.
343 Peruvian Legislation, Law Decree No. 19990, supra note 325, art. 32
344 Peruvian Legislation, Regulation of the Law Decree No. 1999, supra note 331, art. 39.
345 Peruvian Legislation, Law Decree No. 19990, supra note 325, art. 86.
346 Id., art. 38.
347 Id., art. 41.
348 Id.
349 Id., art. 43; Peruvian Legislation, Regulation of the Law Decree No. 19990, supra note 331, art. 43.
350 Peruvian Legislation, Law Decree No. 19990, supra note 325, art. 42.
351 Id., art. 44.
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In any case, the retirement pension cannot exceed the maximum amount of S/. 857. 36 (Nuevos Soles) or $ 280. 00 (US Dollars), and it cannot be less than of S/. 415. 00 (Nuevos Soles) or $ 150.
00 (US Dollars).352
However, a beneficiary can engage in parallel paid work; however, the amount received for that work together with the retirement pension cannot exceed 50 % of the Peruvian Tax Unit (UIT).353 The Ministry of Economy and Finances approved for 2017 the amount of the UIT in S/. 4050.00 (Nuevos Soles).354 The beneficiary must inform the ONP of the “parallel paid work”.355
Finally, the beneficiary of the retirement pension has the right to receive medical care. To obtain this benefit, the ONP will retain 4% of the amount of the retirement pension to guarantee this benefit.356
- Survivor Pension
Peru divides the survivor pension into three subcategories: widowhood pension, orphan´s pension, and ascendants pension.357 As a general rule, these benefits are provided in specific situations: a) when the breadwinner who died qualified for a retirement pension or invalidity pension; b) when the insured employee died as a consequence of an industrial accident or professional illness; and c) when the insured employee died as a consequence of a common accident and was contributing to the national system of pensions.358
Widowhood pension
Persons entitled to this benefit are: a) the spouse of the employee or pensioner who died; b) a spouse with a disability; c) or a person over sixty years of age who depended on the employee or pensioner who died.359
To be entitled to the spousal benefit, the parties must have been married at least one year before the death of the employee or pensioner, and before the male spouse was 60 years old or the female spouse was 50 years old. There are some exceptions to the year of marriage and age rule: a) the employee or pensioner died naturally, b) the husband has one or more children with the employee or pensioner, and c) the widow is pregnant.360 In those cases, the amount payable for this benefit is 50 % of the invalidity or retirement pension to which the employee was entitled.361
352 Ministry of Economy and Finances, “The System of Pensions in Peru”, supra note 273. p. 2.
353 Peruvian Legislation, Law Decree No. 19990, supra note 325, art. 45.
354 Peruvian Legislation, Supreme Decree N° 353-2016-EF “Aprueban el valor de la UIT para el 2017”, 21 December 2016.
355 Peruvian Legislation, Regulation of the Law Decree No. 19990, supra note 331, art. 45.
356 Peruvian Legislation, Law Decree No. 19990, supra note 325, art. 86.
357 Id., art. 50.
358 Id., art. 51; Peruvian Legislation, Regulation of the Law Decree No. 1999, supra note 331, art. 46.
359 Peruvian Legislation, Law Decree No. 19990, supra note 325, art. 53.
360 Id., art. 53.
361 Id., art. 54.
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Orphan Pension
This benefit is granted to the children of the employee or pensioner who are under 18 years old or have a disability preventing any work.362 However, this benefit can be extended when the orphan children are continuing higher education. Initially this right for orphans who are continuing superior studies ended at 21 years old;363 now, however, there is no age restriction.364
Beneficiaries have the right to receive 40% of the retirement or invalidity pension.365 An orphan with a disability who requires permanent attention by a third person receives an additional benefit equivalent to a minimum remuneration.366
- Ascendants Pension
This benefit is granted to the surviving parents of the employee or pensioner, provided that the beneficiaries at the moment of the contingency comply with some conditions: a) the parents have a disability and the father is 60 years old, and the mother is 55 years old; b) the parents were economically dependent of the employee or pensioner; or c) the pensioner did not children or a spouse.
The maximum amount payable to the father and mother is 40% of the retirement or invalidity pension of the employee or pensioner.
In general, to continue receiving the survival pension the beneficiary must: a) report each semester to the ONP its survival condition, b) take the medical examinations demanded by the ONP, and c) report that they are receiving for paid work an amount that does not exceed two minimum wages established each year by Peru. If the beneficiary fails to fulfill these requirements the survival pension is suspended by the Government.367
The survival benefit also expires when: a) the beneficiary gets married; b) the beneficiary with a disability recovers his ability to work; c) the orphan reaches 18 years old or discontinues studies;
or d) when the beneficiary dies.368
II. The System of Social Security in Health: Act No. 26790
The system of social security in health offers coverage for health care, social welfare, and work and professional diseases to employees of public or private institutions.369 The services include prevention, promotion, recovery, and grants to ensure the health and well-being of the
362 Id., art. 56.
363 Constitutional Court of Peru, Case Colegio de Abogados del Cusco y del Callao y mas de cinco mil ciudadanos v.
Parliament of Peru. Judgment File No. 050-2004-AI-TC, Inciso b) Point No. 2, 12 June 2005.
364 Peruvian Legislation, Regulation of the Law Decree No. 19990, supra note 331, art. 51.
365 Peruvian Legislation, Law Decree No. 19990, supra note 325, art. 57.
366 Id., art. 30.
367 Id., art. 64.
368 Id., art. 65.
369 Peruvian Legislation, Act No 26790, “Modernization of the Social Security in Health Act,” 15 May 1997, art 4;
Supreme Decree No. 009-97-SA, Regulation of the Modernization of the Social Security in Health Act, 8 September 1997, arts.1 and 3.
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beneficiaries. The Institution responsible of managing this system is ESSALUD, which is the Public Institution of Social Security in Health in Peru.370
Public and private entities are required to inform the ESSALUD about which employees are contributing to the social security in heath, including their dependents.371
The monthly contributions to social security in health are equivalent to 9 % of the remuneration received by the employee, and 4 % in case of beneficiaries of retirement, invalidity or survivor pension.372 In the case of beneficiaries of a pension, the 4% of contribution should be determined without counting the Christmas and national festivities bonuses.373 These contributions cannot be alienated, so they cannot be subject to provisional measures or judicial executions.374
The coverage of the system of social security in health includes a) benefits for preventive care and medical attention; b) benefits of welfare; c) monetary benefits through grants; and d) funeral benefits.375 To obtain complete coverage the beneficiary must have made monetary contributions to ESSALUD within the 6 months before the contingency. This situation is different in the case of individuals receiving a retirement pension, in which case they are not subject to a time period for contribution.376
a. Prevention and Benefits
Benefits for medical prevention are pivotal to preserving health, and to minimize any risk that might occur.377 This benefit includes health education, the evaluation and mitigation of risks, and immunizations.378
b. Recuperation Benefits
This benefit provides medical attention during an infirmity, with the aim of solving the deficiencies of health that are present. These benefits are: medical attention, the provision of medication, prosthesis and orthopedic implements, and rehabilitation services. This benefit includes care for pregnant mothers.379
c. Welfare and Social Promotion Benefit
These benefits cover rehabilitation for work, helping employees to return to their work positions.380
370 Peruvian Legislation, Act No. 26790, supra note 369, arts. 1 and 2.
371 Peruvian Legislation, Res. Nº 26-SG-ESSALUD-2016. Oficina de la Secretaria General del Seguro Social de Salud (ESSALUD) en la que se comunica la modificación del artículo 5º de la Ley Nº 29816, que establece las funciones de la SUNAT, 5 February 2016.
372 Peruvian Legislation, Act No 26790, supra note 369 art 6; Peruvian Legislation, Supreme Decree No. 009-97-SA, supra note 369, art. 33.
373 Peruvian Legislation, Act No 30334, “Ley que establece medidas para dinamizar la economia para el 2015”, 18 June 2015, art. 3, and 4.
374 Peruvian Legislation, Supreme Decree No. 009-97-SA, supra note 369, art.5.
375 Peruvian Legislation, Act No. 26790, supra note 369, art. 3.
376 Id., art 10; Peruvian Legislation, Act. 28791, “Ley que establece modificaciones a la Ley No. 26790, Ley de Modernizacion de la Seguridad Social en Salud”, 21 July 2006, art. 2.
377 Peruvian Legislation, Supreme Decree No. 009-97-SA, supra note 369, art. 10.
378 Id., art. 11.
379 Id., art. 12.
380 Id., art. 13.
47 d. Unemployment Benefit
This benefit is granted when employment is terminated and the employees contributed for at least five months during the last three years before the contingency. The beneficiaries and dependents are also eligible for health coverage for 12 additional months after the contingency.381
e. Economic Benefits: Grants for Temporary Incapacity or Maternity and Breastfeeding To be eligible for these grants a worker must have contributed for at least three consecutive months or four months of non-consecutive contributions within the six months before the contingency.382
i. Temporary Incapacity grant
This benefit has the aim to compensate economic losses generated by non-work-related accidents. This benefit is paid in money and covers employees until they are able to return to their work.383
The first 20 days of incapacity benefits are paid by the employer and the remainder, up to a maximum of 11 months and 10 days, are paid by ESSALUD.384
ii. Maternity and Breastfeeding grant
The maternity grant compensates for income loss caused by childbirth and the care of the newborn baby. This benefit is granted for 98 days, which period can be divided before, during or after childbirth.385 In the case where the beneficiary of the maternity grant is also receiving an incapacity grant, this latter benefit is suspended.386
The breastfeeding grant is a monetary amount for the care of the newborn baby.387 This grant expires six months from the date when the incapacity due to childbirth has ended or the maximum postpartum period, whichever is longer.388
381 Peruvian Legislation, Act No. 26790, supra note 369, art. 11.
382 Id., art. 12.
383 Peruvian Legislation, Supreme Decree No. 009-97-SA, supra note 369, art.15; Supreme Decree No. 020-2006-TR,
“Aprueban normas reglamentarias de la Ley No. 28791 que establece modificaciones a la Ley de Modernizacion de la Seguridad Social en Salud”, 28 December 2006, art. 4.
384 Peruvian Legislation, Act No. 26790, supra note 369, art. 12.
385 Peruvian Legislation, Supreme Decree No. 009-97-SA, supra note 369, art. 16.
386 Id.
387 Id., art. 17.
388 Peruvian Legislation, Act No. 26790, supra note 369, art. 12; Peruvian Legislation, Supreme Decree No. 009-97- SA, supra note 369, art. 23.
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f. Complementary Accident Insurance for High-risk Activities
This benefit provides additional coverage for work accidents and professional diseases to the affiliates of the system of social security in health. Employers are obligated to provide this benefit for the employees, which covers illnesses, invalidity and funeral costs in case of death.389 This benefit also includes medical attention, rehabilitation and reinsertion to the workplace; however, it does not include the grants of maternity or incapacity that are regulated directly by the ONP.390 Peru has ratified ILO Convention No. 102 dealing with social security minimum standards and the ILO Convention No. 183 dealing with benefit of maternity protection, this latter will enter into force on May 2017.391 Although Peru has not ratified the majority of ILO Conventions on social security, the Peruvian system of social security guarantees the same contingencies established by the ILO Conventions. Therefore, it is necessary to make a comparison between the ILO standards and the national standards with the aim to determine the level of compliance of Peru regarding the ILO Convention No. 102 and standards established in the Inter-American System of Human Rights. The next graphic illustrates that level of compliance.
389 Peruvian Legislation, Supreme Decree No. 009-97-SA, supra note 369, art. 82.
390 Id., art. 83.
391 ILO Convention No. 102 ratified in August of 1961 (only accepted Parts II, III, V, VIII and IX); ILO Convention No. 183 ratified in May of 2016 (not in force until May 2017).